Report No. 67
Reference and Revision-Sections 56-61
From the sections which we have so far considered, it would have been evident that the Collector is the most important public officer vested with primary responsibility for the administration of the stamp laws. The manifold functions exercisable by him render it necessary that there should be some authority which can control the exercise of his function not only to correct errors of judgment but also to secure improvement in the administration of the Act. That authority, again, can conceivably commit mistakes on questions of law. It is desirable that such questions should, so far as the particular State is concerned, be decided by the High Court, since, in the Indian legal system, the High Court is the chief judicial tribunal for questions of law. The provisions which we proceed to consider-sections 56 et seq-are important from the point of view just now mentioned, even though they may not interest the ordinary citizens who has had no occasion to litigate before public officers questions of stamp duties.
21.2. Section 56.-
It is for this reason that section 56 makes detailed provisions whereunder the supervision of the Chief Controlling Revenue Authority over the Collector is ensured in all important cases. Under section 56(1), the powers exercisable by a Collector under Chapter IV and Chapter V and under clause (a) of the first proviso to section 26 shall in all cases be subject to the control of the Chief Controlling Revenue Authority. These provisions embrace several important functions. Further, section 56(2) provides that if any Collector. acting under section 31, section 40 or section 41, feels doubt as to the amount of duty with which any instrument is chargeable, he may draw up a statement of the case, and refer it, with his own opinion thereon for the decision of the Chief Controlling Revenue Authority. According to section 56(3), such authority shall consider the case and send a copy of its decision to the Collector, who shall proceed to assess and charge the duty (if any) in conformity with such decisions.
21.3. Section 56(2)-considered.-
On sub-section (2), a Supreme Court1 case may be referred to. It was held in that case that the Chief Controlling Revenue Authority is a quasi-judicial tribunal when a reference is made to it under section 56(2). It was, therefore, necessary that the executant of th6 document should be heard in such a reference. The Supreme Court pointed out, that the question to be decided by the Chief Controlling Revenue Authority would be one of law, and may result in the payment of large amounts by executants of a document. This judgment should be deemed to have overruled an earlier decision of the Allahabad High Court,2 which was to effect that there is no provision in the Stamp Act for sending a notice of hearing to the executant. The clarification by the Supreme Court is welcome.
It may be stated that the position in this respect was, to say the least, obscure before the judgment. For example, in a Madras case,3 it was held, that there was no right to any oral hearing when the Chief Controlling Revenue Authority was seized of a matter under section 56(1). It was stated that it is enough if sufficient opportunity to state their case is given. The discussion in another Madras case4 seems to consider hearing necessary, under section 56(1). But the question of oral hearing was not in issue.
1. Board of Revenue v. Vidyawati, AIR 1962 SC 1217 (1220), paras. 5-6 (Wanchoo J.).
2. Kasav Prasad v. Chief Controlling Revenue Authority, AIR 1955 NUC 3561 (M.L. Chaturvedi J.).
3. Shnnmugha Mudaliar (in re:), (1950) 2 MUJ 399 (Rajamannar C.J. and Balakrishna Ayyar J.).
4. Annamlal v. District Registrar, AIR 1966 Mad 36 (37, 39) (paras. 3 and 9).
21.4. Recommendation as to section 56(3).-
In our opinion, it would be useful, if in section 56(3), after the words "such authority", the words "after giving the parties a reasonable opportunity of being heard" are added, in order to codify the position resulting from the judgment of the Supreme Court.1
We may mention that the suggested amendment has been favoured by most of the replies to our Questionnaire.2 We, therefore, recommend that section 56(3) should be amended as above.
1. Para. 21.3, supra.
2. Question 62 (section 56).
21.5. Section 57-Introduction.-
Section 57 provides that the Chief Controlling Revenue Authority "may state any case" referred to it under section 56, sub-section (2), or otherwise coming to its notice, and refer such case, with its own opinion thereon, to the High Court specified in thar section. It further provides that every such case shall be decided by not less than three Judges of the High Court to which it is referred, and in case of difference the opinion of the majority shall prevail.
21.6. Word "may" in sub-section (1).-
Though the word used in section 57, sub-section (1) is "may", it has been held by the Supreme Court that1 a reference is mandatory. The sub-section thus imposes a duty on the authority to state the case, if a substantial question of law is raised.
1. Vanarashi Das v. Chief Controlling Revenue Authority, Delhi, AIR 1968 SC 497 (502), para. 9 citing Maharashtra Sugar Mills case, AIR 1950 SC 218.
21.7. Section not limited to pending cases.It has further been held1 by the Supreme Court that this duty to make a reference is not affected by the question whether the case is pending before the Authority or not. The Supreme Court has observed that the Authority is in a similar position as the Income-tax Appellate Tribunal under the analogous provisions in the Income-tax Act.
1. Banarasi Das v. Chief Controlling Revenue Authority, Delhi, AIR 1968 SC 497 (502), para. 9.
21.8. Recommendation as to duty to make a reference.-
In our view, it is desirable to codify the proposition judicially laid down1 about the duty to make a reference. It is also proper to emphasise that the reference can only be compelled on a substantial question of law.
1. Para. 21.6, supra.
21.8A. Number of Judges.-
In cases where the reference under section 57 is heard by a High Court consisting of less than three Judges1 or by the court of a Judicial Commissioner2 having less than three Judicial Commissioners, the present provision for hearing by a minimum number of three Judges is impossible of compliance. Such cases should therefore be excluded from sub-section (2), for obvious reasons.
1. For example, Sikkim.
2. As to Judicial Cominissioners (see also discussion) infra.
21.9. The question may be raised whether the present provision for three Judges should be retained at all. We are, however, of the view that the importance, frequency and universality of questions arising under the Act renders desirable retention of the present scheme. Moreover, there has been no practical difficulty resulting from the present scheme. We, therefore, prefer to retain the present provision-of course with certain changes to be presently noticed or already noticed.1
1. Para. 21.8A, supra.
21.10. Formulation of questions by the Chief Controlling Revenue Authority.-
Though the Act does not specifically state that the Chief Controlling Revenue Authority should formulate the question on which the opinion of the High Court is sought, judicial decisions hold that the question should be formulated.1 Since the High Court cannot express its opinion on matters not referred to it, it is advisable that there should be a provision in the Act for the formulation of questions.2 We recommend an amendment of the section for the present purpose. We may mention that the suggested amendment has been favoured by most of the replies to our Questionnaire.3
1. Vinay Construction and Development Company v. Inspector General of Stamps, AIR 1967 AP 90 (91), para. 6.
2. Cf. Order 46, rule 1, Code of Civil Procedure, 1908.
3. Question 63 (section 57).